Choosing suppliers for your business

The right suppliers provide the most suitable goods or services at the most suitable prices and in the right time frames for your specific business needs.

Finding suppliers

Online is the best way to locate suppliers such as manufacturers and wholesalers. They may also advertise in business directories, such as True Local, Yellow Pages, Yelp, localsearch etc. Attending industry events and exhibitions is another good way to find suppliers and examine their products and services.

You can also use your networks to find suppliers or industry databases and association websites to find lists of local suppliers, including the Industry Capability Network.

Key factors for choosing suppliers are outlined below. Once you have a list of potential suppliers, ask them for written quotations and, where appropriate, a sample of the items you need. You can then compare their services to see which suppliers are the best fit for your business.


Think about location when choosing suppliers. Keeping supply chains local can reduce risks to your business and enhance the sustainability of your business. Using local suppliers often brings benefits to businesses, including more flexibility, greater control, less supply chains costs and it’s good for your community.

In contrast, dealing with more distant suppliers might mean longer delivery times and extra freight costs. Be sure to investigate freight policies of distant suppliers.


Reliability should be another key consideration for choosing suppliers. Reliable suppliers deliver the right goods or services on time, as described.

Large suppliers are generally reliable because they have enough resources and systems in place to make sure they can still deliver if anything goes wrong. However, you can often develop a closer relationship with small suppliers – especially if you are their main customer. In these cases your supplier may also respond better to different requests, such as rush orders or holding on to stock.

Learn more about stock control.


Look for experienced suppliers who have been in business a long time. Stability is important, especially if you are entering into a long-term contract with a supplier or they are the only supplier of a particular item you need for your business.

Exercise due diligence. Check the supplier's credit history to see if they are financially stable. It is worth finding out what businesses have used a particular supplier's services and asking them for a reference.


If you are in a new business, a key consideration for choosing suppliers is affordability. If you are focused on managing your finances, competitively priced suppliers are an attractive option.

However, cheap does not always represent the best value for money. If the quality of your supplier's product or service is poor, you may incur extra costs for returns and replacements, and risk losing business with any delays that result. If you decide to pass poor quality on to your customers, you risk damaging your business reputation.

Learn more about starting a new business.

Business values

It is also worth considering if your suppliers' business values align with yours. For example, if your business has strong environmental or corporate social responsibility credentials, you should consider issues such as product packaging and the environmental processes potential suppliers have in place.

Multiple suppliers

While using a single supplier has its advantages (e.g. you can develop a close business relationship that benefits both sides) it also has its risks. If your supplier goes out of business or cannot deliver, your business will suffer. Consider building relationships with a number of suppliers to help manage your risks.

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